4 Steps You Can Take to Start Preparing Your 2020 Tax Return
December is almost here, the best season to celebrate and also the ideal moment to start working on your 2020 tax return. Here are four steps you can take now to ensure that the process is as easy and simple as possible.
Check Your Withholding
First, make sure that your tax withholding is correct. This can be done easily using the Tax Withholding Estimator from the IRS.
Checking your withholding is important because it helps you avoid unexpected tax bills when you file your 2020 tax return. These are some cases when checking your withholding is particularly important:
- Your refund was smaller than expected when you filed your 2019 taxes this year.
- You owed an unexpected tax bill last year.
- If you got married, bought a house, had a child, or adopted a child.
Get The Documents You Need for Your 2020 Tax Return
Having the right documents on hand makes things a lot easier when you prepare your tax return. These are some of the documents you should start gathering:
- 2019 tax return.
- Form W-2 from your employer.
- Form 1099 from banks and other payers.
- Forms 1095-A if you claim the premium tax credit.
- Notice 1444 that you received with your Economic Impact Payment.
Keep in mind that most income is taxable, including income from the gig economy and virtual currencies, so don’t forget to get any documents related to these types of earnings as well.
Confirm Your Email and Mailing Addresses
You want to get all the forms you need on time, so it’s always a good idea to confirm that your employer and banks, as well as any other payers, have your current email and mailing addresses.
Make Sure Your ITIN Hasn’t Expired
Some Individual Tax Identification Numbers, or ITINs, expire at the end of 2020. They include:
- All ITINs not used at least once on a federal tax return during the last three years.
- All ITINs issued before 2013 with middle digits 88 (for example, 9XX-88-XXXX)
- ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99 that were assigned before 2013 and have not been used.
If your ITIN expires, then you can submit Form W-7 to the IRS to renew it. Taking this step before filing your return will help you avoid delays in your refund and stay eligible for certain tax credits.
More Tips About Taxes
Learning more about taxes is always a smart move. Here are some previous posts you may find interesting.
- These are some expenses educators can deduct from their taxes
- 3 Tools you need after filing your taxes
- Remember: gift cards are not to be used to make tax payments
- Keep in mind these ideas when you file your taxes
- We debunk 4 common myths about tax returns
- Don’t forget this essential step if you are starting a new business
Contact the Experts at JT Tax Services
Need help preparing your taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.